Part 5 (Section 8) Income and Asset Inclusions and Exclusions

Part 5 (Section 8) Income and Asset Inclusions and Exclusions

24 CFR 5.609(b) and (c)

Examples included in parentheses have been added to the regulatory language for clarification.

INCOME INCLUSIONS:

1) The full amount, before any payroll deductions, of wages and salaries, overtime pay, commissions, fees, tips

and bonuses, and other compensation for personal services;

2) The net income from operation of a business or profession. Expenditures for business expansion or

amortization of capital indebtedness shall not be used as deductions in determining net income. An

allowance for depreciation of assets used in a business or profession may be deducted, based on straight line

depreciation, as provided in Internal Revenue Service regulations. Any withdrawal of cash or assets from the

operation of a business or profession will be included in income, except to the extent the withdrawal is

reimbursement of cash or assets invested in the operation by the family;

3) Interest, dividends, and other net income of any kind from real or personal property. Expenditures for

amortization of capital indebtedness shall not be used as deductions in determining net income. An

allowance for depreciation is permitted only as authorized in paragraph (2) above. Any withdrawal of cash or

assets from an investment will be included in income, except to the extent the withdrawal is reimbursement

of cash or assets invested by the family. Where the family has net family assets in excess of $5,000, annual

income shall include the greater of the actual income derived from all net family assets or a percentage of

the value of such assets based on the current passbook savings rate, as determined by HUD;

4) The full amount of periodic amounts received from social security, annuities, insurance policies, retirement

funds, pensions, disability or death benefits, and other similar types of periodic receipts, including a lumpsum amount or prospective monthly amounts for the delayed start of a **periodic amount (e.g., Black Lung

Sick benefits, Veterans Disability, Dependent Indemnity Compensation, payments to the widow of a

serviceman killed in action). See paragraph (13) under Income Exclusions for an exception to this

paragraph;**

5) Payments in lieu of earnings, such as unemployment, disability compensation, worker's compensation, and

severance pay, except as provided in paragraph (3) under Income Exclusions;

6) Welfare Assistance.

a. Welfare assistance received by the family.

b. If the welfare assistance payment includes an amount specifically designated for shelter and utilities

that is subject to adjustment by the welfare assistance agency in accordance with the actual cost of

shelter and utilities, the amount of welfare assistance income to be included as income shall consist

of:

c. The amount of the allowance or grant exclusive of the amount specifically designated for shelter or

utilities; plus

d. The maximum amount that the welfare assistance agency could in fact allow the family for shelter

and utilities. If the family¡¯s welfare assistance is ratably reduced from the standard of need by

applying a percentage, the amount calculated under this paragraph shall be the amount resulting

from one application of the percentage.

7) Periodic and determinable allowances, such as alimony and child support payments, and regular

contributions or gifts received from organizations or from persons not residing in the dwelling; and

8) All regular pay, special pay, and allowances of a member of the Armed Forces, except as provided in

paragraph (7) under Income Exclusions.

9) For Section 8 programs only and as provided in 24 CFR 5.612, any financial assistance, in excess of amounts

received for tuition, that an individual receives under the Higher Education Act of 1965 (20 U.S.C. 1001 et

seq.), from private sources, or from an institution of higher education (as defined under the Higher Education

Act of 1965 (20 U.S.C. 1002)), shall be considered income to that individual, except that financial assistance

described in this paragraph is not considered annual income for persons over the age of 23 with dependent

children. For the purposes of this paragraph ¡°financial assistance¡± does not include loan proceeds for the

purpose of determining income. *(Note: This paragraph also does not apply to a student who is living with

his/her parents who are applying for or receiving Section 8 assistance.)*

INCOME EXCLUSIONS:

1) Income from employment of children (including foster children) under the age of 18 years;

2) Payments received for the care of foster children or foster adults (usually persons with disabilities unrelated

to the tenant family, who are unable to live alone);

3) Lump-sum additions to family assets, such as inheritances, insurance payments (including payments under

health and accident insurance and worker¡¯s compensation), capital gains, and settlement for personal or

property losses, except as provided in paragraph (5) under Income Inclusions;

4) Amounts received by the family that are specifically for, or in reimbursement of, the cost of medical expenses

for any family member;

5) Income of a live-in aide, as defined in 24 CFR 5.403;

6) The full amount of student financial assistance paid directly to the student or to the educational institution

(see Income Inclusions (9), above, for students receiving Section 8 assistance);

7) The special pay to a family member serving in the Armed Forces who is exposed to hostile fire (e.g., in the

past, special pay included Operation Desert Storm);

8)

a. Amounts received under training programs funded by HUD (e.g., training received under Section 3);

b. Amounts received by a person with a disability that are disregarded for a limited time for purposes of

supplemental security income eligibility and benefits because they are set-aside for use under a Plan

to Attain Self-Sufficiency (PASS);

c. Amounts received by a participant in other publicly assisted programs that are specifically for or in

reimbursement of out-of-pocket expenses incurred (special equipment, clothing, transportation,

childcare, etc.) and which are made solely to allow participation in a specific program;

d. Amounts received under a resident service stipend. A resident service stipend is a modest amount

(not to exceed $200 per month) received by a resident for performing a service for the owner, on a

part-time basis, that enhances the quality of life in the project. Such services may include, but are not

limited to, fire patrol, hall monitoring, lawn maintenance, and resident- initiative coordination. No

resident may receive more than one such stipend during the same period of time; or

e. Incremental earnings and benefits resulting to any family member from participation in qualifying

state or local employment training programs (including training programs not affiliated with a local

government) and training of a family member as a resident management staff person. Amounts

excluded by this provision must be received under employment training programs with clearly

defined goals and objectives and are excluded only for the period during which the family member

participates in the employment training program.

9) Temporary, nonrecurring, or sporadic income (including gifts);

10) Reparation payments paid by a foreign government pursuant to claims filed under the laws of that

government by persons who were persecuted during the Nazi era. (Examples include payments by the

German and Japanese governments for atrocities committed during the Nazi era);

11) Earnings in excess of $480 for each full-time student 18 years or older (excluding the head of household and

spouse);

12) Adoption assistance payments in excess of $480 per adopted child;

13) Deferred periodic amounts from supplemental security income and social security benefits that are received

in a lump-sum amount or in prospective monthly amounts;

14) Amounts received by the family in the form of refunds or rebates under state or local law for property taxes

paid on the dwelling unit;

15) Amounts paid by a state agency to a family with a member who has a developmental disability and is living at

home to offset the cost of services and equipment needed to keep the developmentally disabled family

member at home; or

16) The following updated list of Federally mandated income exclusions is from the Federal Register dated

January 31, 2024 and supersedes the notice published in the Federal Register on May 20, 2014. The

exclusions listed below apply to income only, except where HUD states that the exclusion also applies to

assets. Actual income earned from an excluded asset may be included in income if it is not deposited into an

account that is disregarded and excluded under one of the below authorities. If an amount is in an excluded

account, like an Independent Development Account or an ABLE account, then the statute or the regulations

associated with that income/asset exclusion will dictate what portion of the income earned off the amount, if

any, is to be included in the family's income. Please note that exclusions (13) and (23) have provisions that

apply only to specific HUD programs):

a. The value of the allotment provided to an eligible household under the Food Stamp Act of 1977 (7

U.S.C. 2017(b)). This exclusion also applies to assets;

b. Payments, including for supportive services and reimbursement of out-of-pocket expenses, for

volunteers under the Domestic Volunteer Service Act of 1973 (42 U.S.C. 5044(f)(1), 42 U.S.C. 5058),

are excluded from income except that the exclusion shall not apply in the case of such payments

when the Chief Executive Officer of the Corporation for National and Community Service appointed

under 42 U.S.C. 12651c determines that the value of all such payments, adjusted to reflect the

number of hours such volunteers are serving, is equivalent to or greater than the minimum wage

then in effect under the Fair Labor Standards Act of 1938 (29 U.S.C. 201 et seq.) or the minimum

wage, under the laws of the State where such volunteers are serving, whichever is the greater (42

U.S.C. 5044(f)(1)). This exclusion also applies to assets;

c. Certain payments received under the Alaska Native Claims Settlement Act (43 U.S.C. 1626(c)). This

exclusion also applies to assets;

d. Income derived from certain submarginal land of the United States that is held in trust for certain

Indian tribes (25 U.S.C. 5506). This exclusion also applies to assets;

e. Payments or allowances made under the Department of Health and Human Services' Low-Income

Home Energy Assistance Program (42 U.S.C. 8624(f)(1)). This exclusion also applies to assets;

f.

Income derived from the disposition of funds to the Grand River Band of Ottawa Indians (Pub. L. 94¨C

540, section 6). This exclusion also applies to assets;

g. The first $2000 of per capita shares received from judgment funds awarded by the National Indian

Gaming Commission or the U.S. Claims Court, the interests of individual Indians in trust or restricted

lands, and the first $2000 per year of income received by individual Indians from funds derived from

interests held in such trust or restricted lands. This exclusion does not include proceeds of gaming

operations regulated by the Commission (25 U.S.C. 1407¨C1408). This exclusion also applies to assets;

h. Amounts of student financial assistance funded under title IV of the Higher Education Act of 1965 (20

U.S.C. 1070), including awards under Federal work-study programs or under the Bureau of Indian

Affairs student assistance programs (20 U.S.C. 1087uu). For section 8 programs only (42 U.S.C. 1437f),

any financial assistance in excess of amounts received by an individual for tuition and any other

required fees and charges under the Higher Education Act of 1965 (20 U.S.C. 1001 et seq.), from

private sources, or an institution of higher education (as defined under the Higher Education Act of

1965 (20 U.S.C. 1002)), shall not be considered income to that individual if the individual is over the

age of 23 with dependent children (Pub. L. 109¨C115, section 327) (as amended)

i.

Payments received from programs funded under Title V of the Older Americans Act of 1965 (42 U.S.C.

3056g);

j.

Payments received on or after January 1, 1989, from the Agent Orange Settlement Fund (Pub. L. 101¨C

201) or any other fund established pursuant to the settlement in In Re Agent Orange Product Liability

Litigation, M.D.L. No. 381 (E.D.N.Y.). This exclusion also applies to assets;

k. Payments received under the Maine Indian Claims Settlement Act of 1980 (Pub. L. 96¨C420 section

9(c)). This exclusion also applies to assets;

l.

The value of any child care provided or arranged (or any amount received as payment for such care or

reimbursement for costs incurred for such care) under the Child Care and Development Block Grant

Act of 1990 (42 U.S.C. 9858q);

m. Earned income tax credit (EITC) refund payments [1] received on or after January 1, 1991, for

programs administered under the United States Housing Act of 1937, title V of the Housing Act of

1949, section 101 of the Housing and Urban Development Act of 1965, and sections 221(d)(3), 235,

and 236 of the National Housing Act (26 U.S.C. 32(l)). This exclusion also applies to assets;

n. The amount of any refund (or advance payment with respect to a refundable credit) issued under the

Internal Revenue Code is excluded from income and assets for a period of 12 months from receipt

(26 U.S.C. 6409);

o. Payments by the Indian Claims Commission to the Confederated Tribes and Bands of the Yakima

Indian Nation or the Apache Tribe of the Mescalero Reservation (Pub. L. 95¨C433 section 2). This

exclusion also applies to assets;

p. Allowances, earnings, and payments to AmeriCorps participants under the National and Community

Service Act of 1990 (42 U.S.C. 12637(d));

q. Any allowance paid to children of Vietnam veterans born with spina bifida (38 U.S.C. 1802¨C05),

children of women Vietnam veterans born with certain birth defects (38 U.S.C. 1811¨C16), and

children of certain Korean and Thailand service veterans born with spina bifida (38 U.S.C. 1821¨C22) is

excluded from income and assets (38 U.S.C. 1833(c)).

r.

Any amount of crime victim compensation that provides medical or other assistance (or payment or

reimbursement of the cost of such assistance) under the Victims of Crime Act of 1984 received

through a crime victim assistance program, unless the total amount of assistance that the applicant

receives from all such programs is sufficient to fully compensate the applicant for losses suffered as a

result of the crime (34 U.S.C. 20102(c)). This exclusion also applies to assets;

s. Allowances, earnings, and payments to individuals participating in programs under the Workforce

Investment Act of 1998 reauthorized as the Workforce Innovation and Opportunity Act of 2014 (29

U.S.C. 3241(a)(2));

t.

Any amount received under the Richard B. Russell School Lunch Act (42 U.S.C. 1760(e)) and the Child

Nutrition Act of 1966 (42 U.S.C. 1780(b)), including reduced-price lunches and food under the Special

Supplemental Food Program for Women, Infants, and Children (WIC). This exclusion also applies to

assets;

u. Payments, funds, or distributions authorized, established, or directed by the Seneca Nation

Settlement Act of 1990 (Pub. L. 101¨C503 section 8(b)). This exclusion also applies to assets;

v. Payments from any deferred U.S. Department of Veterans Affairs disability benefits that are received

in a lump sum amount or in prospective monthly amounts (42 U.S.C. 1437a(b)(4));

w. Any amounts (i) not actually received by the family, (ii) that would be eligible for exclusion under 42

U.S.C. 1382b(a)(7), and (iii) received for service-connected disability under 38 U.S.C. chapter 11 or

dependency and indemnity compensation under 38 U.S.C. chapter 13 (25 U.S.C. 4103(9)(C)) as

provided by an amendment by the Indian Veterans Housing Opportunity Act of 2010 (Pub. L. 111¨C

269 section 2) to the definition of income applicable to programs under the Native American Housing

Assistance and Self-Determination Act (NAHASDA) (25 U.S.C. 4101 et seq.);

x. A lump sum or a periodic payment received by an individual Indian pursuant to the Class Action

Settlement Agreement in the case entitled Elouise Cobell et al. v. Ken Salazar et al., 816 F.Supp.2d 10

(Oct. 5, 2011 D.D.C.), for a period of one year from the time of receipt of that payment as provided in

the Claims Resolution Act of 2010 (Pub. L. 111¨C291 section 101(f)(2)). This exclusion also applies to

assets;

y. Any amounts in an ¡°individual development account¡± are excluded from assets and any assistance,

benefit, or amounts earned by or provided to the individual development account are excluded from

income, as provided by the Assets for Independence Act, as amended (42 U.S.C. 604(h)(4));

z. Per capita payments made from the proceeds of Indian Tribal Trust Settlements listed in IRS Notice

2013¨C1 and 2013¨C55 must be excluded from annual income unless the per capita payments exceed

the amount of the original Tribal Trust Settlement proceeds and are made from a Tribe's private bank

account in which the Tribe has deposited the settlement proceeds. Such amounts received in excess

of the Tribal Trust Settlement are included in the gross income of the members of the Tribe receiving

the per capita payments as described in IRS Notice 2013¨C1. The first $2,000 of per capita payments

are also excluded from assets unless the per capita payments exceed the amount of the original

Tribal Trust Settlement proceeds and are made from a Tribe's private bank account in which the Tribe

has deposited the settlement proceeds (25 U.S.C. 117b(a), 25 U.S.C. 1407);

aa. Federal assistance for a major disaster or emergency received by individuals and families under the

Robert T. Stafford Disaster Relief and Emergency Assistance Act (Pub. L. 93¨C288, as amended) and

comparable disaster assistance provided by States, local governments, and disaster assistance

organizations (42 U.S.C. 5155(d)). This exclusion also applies to assets;

bb. Any amount in an Achieving Better Life Experience (ABLE) account, distributions from and certain

contributions to an ABLE account established under the ABLE Act of 2014 (Pub. L. 113¨C295.), as

described in Notice PIH 2019¨C09/H 2019¨C06 or subsequent or superseding notice is excluded from

income and assets; and

cc. Assistance received by a household under the Emergency Rental Assistance Program pursuant to the

Consolidated Appropriations Act, 2021 (Pub. L. 116¨C260, section 501(j)), and the American Rescue

Plan Act of 2021 (Pub. L. 117¨C2, section 3201). This exclusion also applies to assets.

Part 5 (Section 8) Asset Inclusions and Exclusions

 ................
................

In order to avoid copyright disputes, this page is only a partial summary.

Google Online Preview   Download